Phila. Papers Sold for $55M

Phila. Papers Sold for $55M

Article excerpt

A consortium of the Philadelphia area's most powerful business
and political leaders has bought the Philadelphia Media Network,
publisher of The Philadelphia Inquirer, The Daily News and
Philly.com, the company said Monday.

The price was $55 million, plus an investment of as much as $10
million in working capital. That is less than half of what the
company drew just two years ago, when the hedge funds Angelo Gordon
& Co. and Alden Global Capital, with the banks that held the
company's debt, paid $139 million for it.

The new owners include George E. Norcross III, a Democratic power
broker in southern New Jersey; Lewis Katz, a parking magnate; and
Joseph Buckelew, a Republican fundraiser and southern New Jersey
insurance brokerage firm owner.

Edward G. Rendell, a former Philadelphia mayor and Pennsylvania
governor, formed the group six months ago and once was its most
public member. But he withdrew amid newsroom concerns that he would
use the papers to advance his political interests.

"There was enough blowback from reporters and editorial people,
because I'm active politically and support candidates and the
president, that I decided to step back," Mr. Rendell said in an
interview. He said the current owners "might ask me my opinion every
once in a while."

The sale came at a tumultuous time for The Inquirer, a 183-year-
old newspaper that has won 18 Pulitzer Prizes and has a rich history
of investigative journalism. The decline in print advertising
revenue affecting newspapers nationwide has led to layoffs and cost
cutting. The company eliminated 45 jobs in March, and there are
reports that it will cut an additional 35 positions in the next six
months.

The new owners said they wanted to preserve The Inquirer and its
tabloid sister The Daily News and bring them into the digital era.
The publications have a combined daily circulation of 488,287,
according to the Audit Bureau of Circulations.